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Talks on the oil and aviation sectors are on the agenda
Talks on the oil and aviation sectors are on the agenda of Wednesday's meeting between the prime ministers of Russia and Ukraine, a Russian government source has said.

Russian Prime Minister Viktor Zubkov and his Ukrainian counterpart Yulia Tymoshenko are not, however, expected to discuss natural gas deliveries - an issue that hit the headlines last week when Russia threatened to turn off gas supplies to its neighbor over unpaid debts.

The government source said Zubkov and Tymoshenko were set to discuss the Odessa-Brody oil pipeline, running from Ukraine's Black Sea coast to Brody, near the Polish border.

The project was initially set to pump Caspian oil to Central Europe, but has instead been used "in reverse mode" since 2004 to transport Russian crude south to the Mediterranean.

"We are interested in the implementation of all the domestic obligations undertaken by Ukraine according to the oil transportation agreement signed in August 2004," the source said.

The representative explained that pumping oil in the reverse direction was profitable for Ukraine, which received $60 million in payment for the transportation of Russian crude last year.

Around 2 million metric tons of oil (15 million bbl) was pumped along the pipeline in 2004 and some 10 million (73 million bbl) in 2007.

The Russian side is also expected to put forward for discussion joint projects in the production of aircraft, as well as helicopter and aircraft engines and components, envisioned in a plan valid until 2009 and signed by the countries' respective presidents.

However, the source denied that the two premiers would discuss natural gas deliveries to Ukraine during the meeting.

"We deliberately keep this issue from being discussed at an intergovernmental level," the source said, adding that all the differences between the two former Soviet republics over the gas issue had been discussed by the countries' presidents on February 12, and that Russian natural gas monopoly Gazprom and Ukraine's state-run Naftogaz had reached a deal on a new scheme of deliveries.

Russian President Vladimir Putin and his Ukrainian counterpart Viktor Yushchenko agreed on a roadmap to settle Ukraine's $1.5 billion debt for Russian gas supplies during the last ditch meeting on February 12. An agreement was also reached to establish direct fuel supplies between Gazprom and Naftogaz.

The Cabinet source also said Zubkov and Tymoshenko were expected to fix the date for a meeting of the Russian-Ukrainian economic cooperation committee, delayed over political developments in Kiev in the wake of parliamentary elections.

Speaking on bilateral trade, the source said the current situation was dynamic. Trade turnover between the countries increased 22% to just under $30 billion in 2007. Imports from Ukraine expanded almost 40%, mostly due to foodstuffs and agricultural products, while Russian exports grew 9% in the same period.

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